It’s no longer just about selling furniture
Diversification is key for survival of office furnishing companies, Kuehn says
By Heather Stur, of SBT
When business owners search their books for areas in which they can cut costs in these tough economic times, one area that tends to get targeted for cuts is furnishing. Old desks and chairs can stick around for another year. The current cubicle structure can remain. Painting can be put off until more money comes in. Office aesthetics are relegated to luxury rather than necessity status.
The depressed economy has caused a trickle-down pattern affecting office furniture manufacturers and dealers. National office furniture sales reached $12 billion in 1999 and rose to $13 billion in 2000, but sales dropped to $8.8 billion last year and are predicted to fall to $8.1 billion this year. That means office furniture dealers must adapt their business practices and modify their services in order to survive.
One local firm that has found ways to weather the current economic depression is Milwaukee’s Building Service Inc.
The 1990s dot-com boom fueled a corollary boom in office furniture sales. When those firms collapsed a few years ago, a glut of used furniture flooded the market when the defunct dot-coms tried to get rid of furniture they no longer needed. Therefore, office furniture dealers had to compete with used furniture peddlers as well as keep sales in tact despite a slumping economy.
BSI’s founders had a vision back in 1947 when they created the company, said Ralph Kuehn, CEO. The firm diversified its services from the start, offering construction, flooring, furniture and design services as well as moving, tear-down, inventory, warehousing and upholstering services.
"We are a one-stop shop for our customers, and that saves them money," Kuehn said. "Customers are more cost-conscious these days, and companies have to respond to that."
Once products and services are in place, firms need sales forces that are stronger than ever to sell when money is tight. That means reminding salespeople of the basics that often were not needed in the prosperous 1990s.
Kuehn refers to the ’90s as a decade that "domesticated the sales force." When an animal is in the wild, it must hunt for its food. But when it is domesticated and fed everyday, it no longer needs to hunt and thus becomes soft. The ’90s produced so much business that salespeople didn’t need to hunt for it.
Times have changed, and BSI is putting its salespeople back on the streets to knock on doors, get referrals and pound the pavement. One Saturday each month the sales team comes to the office for back-to-basics sales training.
Although major national office furniture stores are facing financial difficulties – Steelcase has laid off 10,000 employees – mid-market firms are hanging on for a number of reasons. The national distributors focused mostly on Fortune 500 companies, and those companies, as a rule, are not buying, Kuehn said. Mid-market sellers whose customers include medium and small businesses can develop stronger relationships with their customers because they often work with the owners and become privy to the firms’ future plans. Sellers then can be proactive in meeting their clients’ needs, Kuehn said.
Additionally, customers now recognize that distributors of various sizes usually offer the same products. A file cabinet is a file cabinet regardless of the size of the distributor who sells it.
"The Chevy can get me to work and back just as well as the Mercedes, so why do I need the Mercedes?" Kuehn said. "Clients are holding stores more accountable for prices."
Ultimately, furniture dealers must show their clients how their products will improve the bottom line, Kuehn said. The right furniture, the right ergonomics, are forms of preventive health care. Attractive cafeterias and locker rooms increase employee productivity. All of this leads to a healthier bottom line, Kuehn said.
"It’s not just about selling furniture anymore," Kuehn said. "How are we going to solve the customer’s problems?"
July 25, 2003 Small Business Times, Milwaukee
